Car Subscriptions: What Are They & Are They Worth It?

Subscription services have become a staple of modern life. Whether it's TV programming—think Netflix or Foxtel—or computer software, magazines, online news, and mobile phones, paying a recurring fee for access is now second nature. While we're accustomed to seeing these services in media, software, and communication, the automotive industry also embraces this model. Car subscriptions offer a compelling alternative to traditional ownership for consumers deciding whether to buy a new vehicle.

At its core, a car subscription is straightforward: one recurring fee grants access to a fleet of vehicles, covering everything from insurance, registration, and maintenance to roadside assistance. It couldn't be easier. The real appeal, however, lies in the flexibility to swap vehicles within the fleet, often with just a few days' notice. This means you can select a car that fits your current needs. A small city car is great for urban commuting, but not ideal for a rugged outback journey. A scenic family trip along the Great Ocean Road might be more enjoyable in a spacious luxury vehicle with all the amenities.

While companies like Carly and Carbar exclusively offer car subscriptions, the model is intriguing enough to capture the interest of manufacturers and dealerships. In the U.S., brands like Porsche, Mercedes-Benz, FCA, Ford, and Volvo have launched subscription programs. Volvo has even shown interest in bringing its "Care by Volvo" service to Australia.

Despite the simplicity, car subscriptions come with certain conditions. There might be a joining or membership fee, and various subscription tiers could offer different mileage allowances and insurance coverage for damages. Additionally, restrictions like no smoking or pet transport in the vehicle are common.

Is a Car Subscription Worth The Cost?

The value of owning a car versus subscribing to one depends entirely on your situation. Let's use my circumstances for a quick comparison.

I drive a 2016 Holden Malibu, a midsize sedan in good condition with 52,000 km on the odometer, and a full-service history, which I purchased for just over $12,000. The registration costs $60 per month, insurance is $68 per month, and I pay $298 monthly in loan repayments, plus $220 annually for roadside assistance. A scheduled service will cost me about $220 in the coming months. When you break these costs down to a weekly payment, I spend roughly $108 per week. Adding around $1,000 annually for new tyres and brake pads, maintenance pushes the total to about $127 per week.

How does this compare to subscription services? I couldn't find a Holden Malibu, so I chose a midsize Toyota Camry with similar specifications for comparison. Even on basic subscription tiers, I couldn’t find one for less than $159 per week. While that’s close, additional fees for pets and smoking (I have a dog and, admittedly, I smoke) make subscriptions less appealing for me at this time.

However, this comparison might favour subscriptions in other situations. For instance, if you own a luxury vehicle, the high maintenance, parts, and depreciation costs might make a subscription more appealing to avoid losing thousands when selling the car.

Similarly, a subscription might make sense if you're indifferent to the type of car you drive. Buying an old, high-mileage vehicle might initially be cheaper, but the repair costs can add up, leaving you with a worthless car. In such cases, spending over $100 weekly for a clean, reliable car through a subscription could be a smart choice.

The Pros & Cons of a Car Subscription

The Advantages:

Hassle-free

There’s a lot to be said for the one-fee-covers-everything subscription model. Only having to consider the price of fuel is pretty cool.

Long-term Test Driving

Purchasing a car can be a daunting and costly experience, so it's essential to choose the right vehicle. Consider using a subscription service to try different makes and models over several months. This approach ensures you find the perfect car for your needs before committing to a purchase.

The Choices

The biggest selling point, I think, is being able to swap between makes and models. Personally, I’d love to swan about in a brand-new Range Rover for a couple of weeks, before moving onto an Audi, then a Jag . . . you get the picture.

The Disadvantages:

The Cost & Fees

It's not the most affordable option. Companies providing this service, whether manufacturers, dealers, or car subscription companies, are businesses, not charities. Ensure you fully understand what you're paying for.

Pets & Ciggies

No pets allowed (or at least some restrictions on their transport) and no smoking. It's understandable, as companies want to maintain their investments in top condition. However, if you're a committed smoker who enjoys taking your dog for a drive, this option might not suit your needs.

The Limitations

While there are restrictions on the number of kilometres you can travel, the allowance generally appears to be quite generous, extending up to approximately 3000 kilometres.